Enhacement of the role of public regulation in financing of innovative activity of the region

The aim of the article. The purpose of the article is to suggest the mechanism which will define the priorities in financing the innovative activity and distributing the assets attracted by the regional authorities among submitted projects.The results of the analysis. The results of the research show that the main factors which hinder the innovative activity of businesses in Ukraine are limitation in financial resources, defects of lawmaking, the necessity of strict expenditure optimization and economic factors such as risks and a long payback period.The main task of the innovative management on a regional level is to choose and apply the most optimal management mechanisms of innovative processes for certain economic conditions and to further ensure the rational use of the resources available in the region.To focus the means of encouragement for the businesses in the region to improve their innovative activity, the authors suggest the financing mechanism of the innovative activity of the regional businesses which consists in attracting public/utility company Agency of the regional council development (created in 2014) and conferring such additional powers: to ensure complete and timely asset incoming in compliance with the determined priority of innovative activity trends; to carry out credit operations, the right to be a guarantor and to allocate assets on deposits in bank institutions.The scheme of financing mechanism of the innovative activity by the Agency of the regional development was worked out.The algorithm of the choice of innovative projects for civil financing at the expense of the accumulated assets which determines the indicator of priority financing according to a parameter that identifies the hierarchy of scientific-technological priorities was grounded; the latter will be used on a branch and regional level and real branch potential of the economic activity is taken into account; the algorithm is adjusted to the degree of the project innovation and its significance for a certain region.The suggested mechanism will allow to avoid non-effective and non-purpose use of deficit assets and to prevent the situation when socially necessary and strategically important projects for the region are not implemented because of the lack of interest from the investors. Thus, the application of this model for the management of financing the innovative regional development gives hope for the enhancement of the innovative activity of the region.Conclusions and directions of further researches. In further research, it is expedient to pay attention to studying new, more efficient mechanisms of the enhancement of the innovative activity of both producers and investors and self-governing authorities on a regional level.